In what marks something of a departure from his general vocal optimism with regard to the UK economy that characterised his Autumn Statement and spending review, George Osborne has warned of a potential “cocktail” of economic risks we may face over the next year.
“2016 is the year of mission critical” said the Chancellor in an interview with the BBC, warning that in this “uncertain world” we are far from the point of “mission accomplished” with regard to domestic economic growth.
Citing general global economic troubles, particularly in areas like the Middle East and China for example, Osborne warned strongly against economic complacency and against support for over exuberant government spending.
He said; “You have has peopleÖsaying ëwe ‘ve got to spend billions of pounds here or billions of pounds there, the country can afford it ‘”; warning that such statements put us at risk of entering back into “the old ways that got Britain into that mess.”
These “old habits” he said, “are re-emerging in some of our national debate and I need to remind people that it ‘s a very challenging world out there, that Britain still has big economic problems that it needs to fix.”
While, in his recent spending review, Osborne was ostensibly optimistic about the state of our economy, he reminded in these latest statements that such optimism is conditional on the success of what he described as a four-year plan that his changes announced in the review have put in place. Success that he is confident of certainly, but success that has not yet been achieved.
“It is precisely because we live in an uncertain world. It is precisely because we have not abolished boom and bust as a nation, that you need to take these steps,” he said, referring to his plan to ultimately boost productivity by increasing competition in business and creating more jobs.
“Ödifficult steps,” he went on, “and I need to go explaining to the public, that the difficult times aren ‘t yet over, we have got to go on making the difficult decisions, precisely so that Britain can continue to enjoy the low unemployment and the rising wages that we see at the moment.”
He went on the allude to the inevitable but regularly delayed interest rate rise, saying that it will come at (and be a sign of) a time when our economy has strengthened sufficiently.
“I am determined to see through the plan that has got the British economy in the stronger position that it is in today” he said.
“We have to make sure we are ready for whatever the interest rate environment is,” he said, denying that he himself was putting pressure on the Bank of England to raise rates soon, adding that “people like Mark Carney would not respond to that pressure.”